The Kentucky Bankers Association is challenging the legal authority of the state's Republican attorney general to demand detailed information from six large banks as part of an investigation into their efforts to address climate change.
In a recent lawsuit, the trade group accused Kentucky Attorney General Daniel Cameron of overstepping statutory limitations by compelling the banks to produce documents, communications and information related to their environmental lending practices.
The industry group also alleged that the AG's investigative demands violate the First Amendment rights of banks by effectively seeking ongoing state surveillance into their communications.
"Not only is the Attorney General acting outside his jurisdiction and authority, he is wasting and improperly spending taxpayer funds in his improper efforts to do so," the lawsuit states.
Cameron, a Republican who was elected in 2019, sought last week to have the suit moved from a state court in Franklin County, Kentucky, to federal court.
A spokesperson for the Kentucky attorney general's office declined to comment Wednesday, except to say in an email that the office is reviewing the lawsuit and plans to file a response by a court deadline next Wednesday.
The Kentucky attorney general's office said in a statement last month that it was joining
"We joined this investigation to ensure Kentucky companies that reject the Biden administration's anti-fossil-fuel climate agenda have the same financial freedoms as those who accept it," Cameron said in the statement.
The six banks that received civil investigative demands from Cameron's office are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo. BofA and Wells Fargo are both members of the Kentucky Bankers Association, according to Debra Stamper, the trade group's general counsel.
Spokespersons for JPMorgan, Morgan Stanley and Wells Fargo declined to comment Wednesday on the lawsuit, while the three other banks did not respond to requests for comment.
The Kentucky Bankers Association, which was joined as co-plaintiff in the suit by a subsidiary that finances low-income housing, alleged that Cameron's scrutiny of ESG lending policies is an unlawful attempt to "regulate the business of banking."
The trade group's chief executive, Ballard Cassady, said in a statement that Cameron is exceeding "any authority that he has" to scrutinize the climate policies of banks, even after Kentucky lawmakers passed legislation earlier this year in an attempt to restrict corporate ESG policies. Conservative politicians view those policies as potentially harmful to the state's economy.
"We are forced to respond to the Attorney General's action in seeking vast amounts of information from our member banks that greatly exceeds the terms and obvious intent of that original statute," Cassady said in the statement.
The lawsuit represents the latest salvo in an ongoing battle in which conservative lawmakers are
The Republican attorneys general launched their investigations after a recent dispute between certain banks and the Glasgow Financial Alliance for Net Zero, a global climate alliance whose members include banks.
As the Republican backlash to global climate commitments strengthened, some banks became concerned that maintaining membership in GFANZ could expose them to legal risks in the United States.
In September, the dispute boiled over, as Bank of America, JPMorgan and Morgan Stanley reportedly threatened to leave the coalition. Ultimately, GFANZ and the U.N. initiative
Over the last year, an anti-ESG movement has been gaining momentum in conservative-led states across the country.
In June, West Virginia State Treasurer Riley Moore threatened to bar six financial institutions — including JPMorgan, Goldman Sachs, Morgan Stanley and Wells Fargo, as well as BlackRock and U.S. Bancorp — from doing business in the state over an alleged boycott of energy companies.
